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Indian ad agencies expect sizeable growth from new brand and product launches

In a conversation with BestMediaInfo.com, agency heads across media, creative and digital say a record launch of brands and products in 2020 would drive growth for the ad industry this year

Estimates by markets research and insights firm Nielsen show that FMCG companies launched 9,700 new products in the April-September period last year—a surge of nearly 35% compared to 7,200 launches in the same period in 2019.

There have been 1,897 new launches in the health and hygiene segment in the wake of Covid and all of that should definitely play a role in the A&M spends.

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Speaking to BestMediaInfo.com, agency heads across media, creative and digital segments said the year 2020 saw a huge rise in some categories and fall in some. While FMCG will continue to be the largest spender, telecom, e-commerce and household durables will form a strong number two. Pharma and healthcare, ed-tech, OTT and gaming will see some aggressive spends. Multiple new advertisers have come on board in 2020 for the first time in this space and would continue in 2021.

With the digital transformation, more financial services will move to tech platforms; newer services, mobile wallets, digital payment gateways, etc., would also see huge advertising.

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From a revival point of view, real estate, auto and tourism will try to give a push.

Anand Bhadkamkar

“Many new subcategories got launched under hygiene, which would continue to grow. Personal care products (hair colour, hair removers, bleach, etc.) grew and personal grooming (hair shaver, hairdryer, epilators, etc.) also saw an excellent off-take as people have started grooming themselves at home. So the trend will continue,” Anand Bhadkamkar, CEO, Dentsu International, India, said.

Hari Krishnan

“Some brands will create entirely new categories, some brands will find new ways to disrupt existing categories, some brands may find new consumer segments for their brands and some brands may improvise/innovate their products, thereby finding new relevance among their consumers. So all of this promises exciting times ahead for brands and marketers,” Hari Krishnan, CEO, Mullen Lintas, said.

Bhadkamkar said edu-tech will witness huge funding and momentum across advertisers.

Experts said pharma-tech has yet not seen the scale it should, but the category holds a strong potential for growth this year.

Bhadkamkar said the agency expects 45-55% growth from the new categories, which is going to be actively present in the market.

“The top categories mentioned would contribute to nearly 55-60% of the overall A&M growth over 2020. The spends are coming on the back of 2020, which was a tumultuous year,” said Bhadkamkar.

According to Krishnan, in the context of last year, there are many emerging sub-categories such as convenience commerce, which could see a spike in spends as new brands get launched. A spike of about 10-15% growth can be expected from new categories.

Naveen Gaur

“We have partnered with some new and emergent category players in 2020 and are positive to build it forward this year. A step in that direction was pioneering a proprietary framework ‘Restart & Restrat’, perhaps an industry-first tool conceptualised by our consulting arm ‘LinConsult’. This framework is centred on analysing the impact of the pandemic across existing and upcoming consumer categories in the short, medium and long run, and helping devise strategies to overcome the crisis. The deployment of this tool for our existing and mushrooming brands holds a lot of promise for our clients and consequently our business,” said Naveen Gaur, Deputy CEO, Lowe Lintas.

Harikrishnan Pillai

TheSmallBigIdea has seen a huge inflow of business coming from digital content distributors and e-commerce in 2020, and the agency sees that continuing in FY21. “We have exposure to education and sports in its physical avatar, which is already opening up opportunities for us in the digital world too. We will also be looking at reviving our tourism business,” said Harikrishnan Pillai, CEO and co-founder, TheSmallBigIdea.

“India is set to witness a big three combination of sorts — IPL, the World Cup and the Olympics. This will establish excitement with existing categories and will lead to the emergence of new advertisers, said Priti Murthy, CEO, OMD India.

Akshay Gurnani

Akshay Gurnani, Co-Founder and CEO, Schbang, said, “For Schbang, we believe to be able to see a 25-30% increase in our media business this year, with major brands moving spends from mainline to digital. Early forecasts say digital will take over TV in a couple of years."

Gurnani said investments in marketing technologies (MarTech) to solve business goals is increasing, led by CRMs, ERPs and email marketing, which converts consumers across the funnel to conversion. It will be an overall contributor to the A&M space in the year 2021.

Anil Nair

“A combination of new brands and categories, investments in digital, content and commerce, and traditional big spenders returning, combined with the country opening up, will ensure the A&M space is in the green,” said Anil Nair, CEO, VMLY&R, India.

Nair said traditional categories that lost out in 2020 will come back strong, especially in the period leading from summer to the festival season, given the talks of the vaccine and return to some semblance of normalcy.

Info@BestMediaInfo.com

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